Posting Point
There are things you need to keep in mind when it comes to credit card debt recovery. First, you must know that not all collections come into play when an account goes into debt. Usually, as the original creditor, they’ll attempt to collect the debt for somewhere between 90-120 days, and when unable to collect the payment, it goes to the credit card collection agency. Also, when it’s about the original creditor sending the account to a debt collector, this means the creditor has probably sold the bill to the collector at a much lower price than the debt balance.
But, this isn’t always the case. Many times there are credit debt recovery services to collect the debt. The old debts tend to be sold off to debt collectors. Besides, large financial forms often run internal debt collection departments. You’ll see this almost always with credit card companies.
When an account goes to collection
When an account goes for collection, here’s how the agents run the collection process,
- The account will show up on the credit report as a collection
- The credit score takes the final hit
- You receive correspondence from the debt collector
The overall level of communication depends on the nature of the debt and the credit card collection agency. The process initiates with a letter in the mail, moving to periodic calls. If the collection agency cannot collect debt right away, the agency will progressively get more aggressive with you.
The debt collection agencies will run absolute techniques to ensure the money gets into your account.
What can debtors do if collectors contact them?
The first thing you must know when a credit card collection agency contacts you is to request that all communication from now on can be in writing; do not communicate over the phone. Then, you need to write them a letter requesting that they validate the debt. The process in which the credit card collection agency is legally required to provide documentation that the debt is indeed yours.
Sometimes they don’t have the documentation for this, resulting in them ceasing to attempt to collect the debt. Therefore, when you forward the letter, it’s vital that you specifically say that they can’t provide documentation that the debt is yours; not only stop contacting you, but they must also remove the collection from the credit report.
Validation of debt
It could also be the case that the collection agency can validate that the debt is yours. Credit card collection agency need to take proactive steps to negotiate with the collectors. Not only do you need to pay off the debt, but you must also remove it from the credit report. There’s also something called Pay for Deletion. The idea here is simple; the consumer needs to agree to pay the debt in exchange for the account to be paid in full as well as removed from the credit report.
The role of debt collectors
Creditors hire debt collectors to chase you for the debt on their behalf. They might ultimately sell the debt. The selling happens at a much lower amount than you originally owed. The collection agency will want to recover as much of the original debt as possible to make a profit.
In case the debt collector has bought the debt from the original creditor, they will want to collect as much money as possible. However, you must also know that the number of acceptable expenses varies from one service provider.
Legal Repercussions of Unpaid Credit Card Debt
For those customers dealing with credit card debt, a recovery collection agency might be running calls in order to collect outstanding dues. Besides, debt collectors may be using aggressive tactics, including threatening jail time. However, can they really take you to jail over credit card debt?
In this article, we’ll focus on legal repercussions when consumers fail to clear their debt. So, let’s not waste any time further and look into the matter.
Legal proceedings
Can credit card debt land a consumer in jail? The answer is no. The Fair Debt Collection Practices Act includes guided regulations. Moreover, credit card debt recovery services may not threaten criminal prosecution and jail time. However, a consumer may still go to jail. While no consumer will be charged with a criminal act for not paying debts, the recovery collection agency may still take you to civil court and get a judgment in their favor. This means you must pay the debt as agreed or the wages garnished until it’s paid.
However, if the consumer misses a payment or fails to follow the steps as outlined, they could be held in contempt of court. This could end with you being sent to jail. In addition, a consumer may remain in prison until they can post bond. This is often the same amount as the judgment against you.
Follow the court orders
There are no debtor’s prisons in the United States. Moreover, you can’t go to jail for failing to make payment. However, a credit card debt recovery agency may be taken to court, assuming you find yourself stuck with a civil judgment ordering you to pay the debt. However, failure to fulfill the requirement may possibly lead to arrest.
These types of activities happen in the rarest of rare cases where there is an aggressive creditor and a willing court. Besides, civil cases take a while to work through the system—meanwhile, it’s best to settle the debt or make an ongoing arrangement without a civil judgment. In case you miss a payment, it’s best to contact the debt collector and work out a plan.
Unpaid child support or delinquent taxes
Unpaid credit card debt might not land you in jail; however, unpaid taxes and child support can be another matter. Besides, failing to pay taxes is a crime. If you’re prosecuted, you could end up in jail. Likewise, if you’ve been ordered by a court to pay child support and fail, you may be found in contempt of court. This may lead to jail time.
